Does Speedy Hire Plc's (LON:SDY) CEO Pay Reflect Performance?

Russell Down has been the CEO of Speedy Hire Plc (LON:SDY) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Speedy Hire

How Does Russell Down's Compensation Compare With Similar Sized Companies?

According to our data, Speedy Hire Plc has a market capitalization of UK£445m, and paid its CEO total annual compensation worth UK£1.3m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at UK£380k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from UK£154m to UK£615m, we found the median CEO total compensation was UK£643k.

It would therefore appear that Speedy Hire Plc pays Russell Down more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Speedy Hire has changed from year to year.

LSE:SDY CEO Compensation, February 18th 2020
LSE:SDY CEO Compensation, February 18th 2020

Is Speedy Hire Plc Growing?

Speedy Hire Plc has increased its earnings per share (EPS) by an average of 77% a year, over the last three years (using a line of best fit). It achieved revenue growth of 5.7% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Speedy Hire Plc Been A Good Investment?

Most shareholders would probably be pleased with Speedy Hire Plc for providing a total return of 76% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We examined the amount Speedy Hire Plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Speedy Hire insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.